GTS Blog

GRI season is upon us. With many of the major LTL carriers already announcing their numbers, it looks like September will bring increases in the range of 4-6%. What can you do to prepare and possibly mitigate the costs of general rate increases?

All too often do organizations over simplify their inbound shipping program. Effectively controlling and managing the inbound chain is a difficult and ever evolving process that take a great deal of resources and collaboration. The smallest adjustment to your program can disrupt your entire supply chain process. Similarly, this program cannot be left unmanaged. Without management driving inbound to be a priority, it is typically not handled properly resulting in higher costs.

However, there is a great deal of opportunity to reduce cost within your supply chain. If handled properly, companies could improve predictability and reliability of their inbound shipments, improve service and operational excellence, while reducing cost within the supply chain.

As your business grows and becomes more dynamic, so does your supply chain. While your strengths lie in earning new business, marketing, and/or operations, it is difficult to dedicate the proper time to your supply chain. Growth is a time to reevaluate your current logistics process and find opportunities to streamline and save. But where do you begin this process? What type of evaluation is required to determine what the best fitting solution for your needs?

Before you begin talking to vendors or implementing changes, it’s important to gain full visibility of how your supply chain operates today and determine costs involved, both hard and soft. Below are 3 steps to take to determine the current state of your supply chain.

After a detailed evaluation of your logistics program and departments, your organization realized their need to partner with a third-party logistics provider (3PL) to more proactively manage their freight. Now that you have a greater understanding of your supply chain’s current and future states, it’s time to send a bid to a 3PL, but where do you start? If you have never sent a bid or Request for Proposal (RFP) to a 3PL, it can difficult to navigate what to include in your bid and which questions to ask during the bidding process. In this blog, the GTS experts weigh in on best practices.

General Rate Increase or GRI, is the average amount by which a tariff rate increases, which is applied to your company’s base freight rate. GRIs can occur multiple times throughout the year and it likely you have already experienced rate increases. Although each GRI may have a small impact on your overall logistics costs, over time they can quickly add up. As a result, GTS recommends revisiting your freight rates periodically throughout the year to ensure you are receiving the value you expect from your vendors. Below are 3 tips to keep in mind while reviewing your current contracts:

The ability to effectively manage your supply chain has a direct impact on the organization’s bottom line and market share. With new customer demands and advances in technology, businesses must have visibility into their processes to ensure products are being delivered and meeting customer’s expectations, all while reducing costs. Likewise, the increasing complexity of today’s supply chains has made it more difficult to monitor and control related tools, activities, and procedures. By achieving visibility, managers can more effectively identify and manage risks in the supply chain and respond to customer demands and other complexities in real time. However, this is easier said than done.

In a recent shipment, a GTS client ran into a costly shipping mistake that we often see. In this situation, the shipper faced additional carrier charges due to miscommunication. The freight was called into the carrier and reported on the BOL with the dimensions of 40”x48” (13.3’); however, they loaded their freight on the truck as 48”x40” (16’). Since the shipper loaded their freight in the truck differently than they originally noted on their shipping paperwork, they exceeded the designated linear foot rule, resulting in additional charges. How does this happen?

Depending upon your shipping habits, you have probably, experienced the wrath of the carriers. Frequent shippers often run into a number of discrepancies and face additional charges for things that seem minor. While infrequent shippers struggle to remember all the little details to shipping that the carriers require for their process. Not adhering to the carrier’s long list of preferences can lead to additional charges and repeat offenders can land on a carrier’s ‘difficult shipper’ list. If a carrier finds on multiple occasions that your freight is not the weight, size or packaged as you originally reported, they will place you on a list to be audited each time you ship to ensure you are following best practices. Each discrepancy adds to the overall cost to ship.

Tracking key performance indicators (KPI’s) will help you know which carriers are keeping you on course to profitability. Using a scorecard that measures carrier performance promotes better dialog and provides a quantifiable way to measure the success of the relationship between all parties involved.